If it is up to Minister of Consumer Affairs Kista Marks, maximum rates for file costs will be set this year. The immediate reason for this promotion is the increase that Best Bank has implemented on 1 September for administrative costs for a home loan; a second adjustment within a period of six months. New customers now have to pay 500 dollars to prepare a file, while existing customers are charged 700 dollars when they want to refinance their mortgage loan. Both rates had already been raised from April 250 to $ 350. Other commercial banks also raised their rates this year, and are playing with the idea of further adjustment. By setting limits, the government wants to prevent proliferation.
Are the increases a compensation for the low interest rate?
Although it is denied by the banks, it is generally assumed that the price adjustment for administrative services is a consequence of the persistently low lending rate. As a result, the profits on mortgage loans have fallen considerably in recent years. And because of the zero-interest policy of the Lenders Bank, no change is expected in this area for the time being. By increasing the costs of creating a file, the commercial banks try to compensate “the loss” in interest somewhat.
The financial institutions cannot count on the sympathy of Minister Marks. He believes that the annual figures show that the banks are making a sufficient profit. Best Bank , for example, recorded a positive balance of one billion dollars in the first half of the year. Marks: “I understand very well that consumers cannot understand that the banks are making a profit on the one hand, which is a good thing in itself, and on the other hand increasing costs.”
Banks prefer not to refinance
Behind the almost tripling of the file costs for refinancing at Best Bank is a bit of discouragement. Banks are not happy that existing customers want to negotiate a cheaper contract with every reduction in market rates. However, Best Bank mentions as a reason for the substantial adjustment that the administrative burden is higher when an existing agreement is opened and the new one is drawn up at the same time.
Minister Marks wants to set a ceiling for file costs through royal decrees. For other banking services too, the minister is thinking in the short term of maximum rates. Decisions must also enforce greater transparency in the costs that banks charge for their services.